Foodtech and quick commerce giant Zomato has gained shareholder approval to raise ₹8,500 crore via Qualified Institutional Placement (QIP). The decision, formalized through a board resolution, comes as Swiggy prepares for its IPO, setting the stage for intensified competition in the sector.
To kickstart this funding round, Zomato has engaged investment bank Morgan Stanley, signaling a strategic move to strengthen its market position. The funds will be raised through equity issuance to eligible investors, as detailed in the company’s stock exchange filing.
The infusion of fresh capital is expected to heighten competition in the quick commerce segment. Swiggy, already fortified with ₹4,500 crore from its IPO, and Zepto, backed by a recent ₹3,000 crore funding, are poised as formidable rivals. This strategic raise will bolster Zomato’s financial footing, allowing it to remain competitive in this fiercely contested market.
In addition to the QIP, Zomato received approval for implementing its Employee Stock Option Plans (ESOPs) for 2018, 2021, 2022, and 2024 via the trust route, along with amendments to these plans. The company has also been authorized to provide interest-free loans to the Foodie Bay Employees ESOP Trust to facilitate these initiatives.
Financially, Zomato has displayed robust growth. Its operating revenue surged by 68.5% year-on-year, reaching ₹4,799 crore in Q2 FY25, compared to ₹2,848 crore in Q2 FY24. The company also recorded a 4.8X jump in net profit, achieving ₹176 crore in Q2 FY25.
A recent report by Motilal Oswal highlights that Blinkit, owned by Zomato, dominates the quick commerce market with a 46% share. Zepto and Swiggy Instamart follow with 29% and 25% market shares, respectively. This fundraise further solidifies Zomato’s intent to maintain its leadership position in the industry.